QUALIFIED MEDICAL EXPENSES FOR HEALTH SAVINGS ACCOUNTS
The following pages are excerpted from the HSA Road Rules, first edition, published by Dan Perrin of the HSA Coalition on December 7, 2004. Communicating for Agriculture and the Self Employed is a member of the HSA Coalition. For more detailed information go to www.irs.gov and search for Publication 502.
Allowable (tax-free) Expenditures from Your Health Savings Account
There have been thousands of cases involving the many nuances of what constitutes medical care for purposes of section 213(d) of the Internal Revenue Code. A determination of whether an expense is for medical care is based on all the relevant facts and circumstances. To be an expense for medical care, the expense has to be primarily for the prevention or alleviation of a physical or mental defect or illness. The determination often hangs on the word primarily. Note: If you are receiving federal or state unemployment insurance, you may pay for your health insurance premiums out of your HSA.
Examples of Allowable Expenditures from Your Health Savings Account:
Acupuncture, Alcoholism Treatment, Ambulance, Artificial Limb, Artificial Teeth, Bandages, Birth Control Pills (by prescription), Breast Reconstruction Surgery (mastectomy), Car Special Hand Controls (for disability), Certain Capital Expenses (e.g., for the disabled), Chiropractors, Christian Science Practitioners, COBRA premiums, Contact Lenses, Cosmetic Surgery (if due to trauma or disease), Crutches, Dental Treatment, Dermatologist, Diagnostic Devices, Disabled Dependent Care Expenses, Drug Addiction Treatment (inpatient), Drugs (prescription), Eyeglasses, Fertility Enhancement, Guide Dog, Gynecologist, Health Institute (if prescribed by physician), H.M.O. (certain expenses), Hearing Aids, Home Care, Hospital Services, Laboratory Fees, Lasik Surgery, Lead-Based Paint Removal, Learning Disability Fees (prescription), Legal Fees (if for mental illness), Life-Care Fees, Lodging (for out-patient treatment), Long-Term Care (medical expenses), Long-Term Care Insurance (up to allowable limits), Meals (associated with receiving treatments), Medical Conferences (for ill spouse/dependent), Medicare Deductibles, Medicare Premiums, Mentally Retarded (specialized homes), Nursing Care, Nursing Homes, Obstetrician, Operating Room Costs, Operations – Surgical, Ophthalmologist, Optician, Optometrist, Organ Transplant (including donor’s expenses), Orthodonture, Orthopedic Shoes, Orthopedist, Osteopath, Out-of-pocket expenditures and deductibles for, Your spouse or dependent even if insured under a non-HSA health plan, Out-of-pocket expenditures while enrolled in Medicare, Over-the-Counter Medicines, Oxygen and Equipment, Pediatrician, Personal Care Services (for chronically ill), Podiatrist, 486 2
Examples of Allowable Expenditures continued:
Post-Nasal Treatments, Prenatal Care, Prescription Medicines, Prosthesis, PSA Test, Psychiatric Care, Psychiatrist, Psychoanalysis, Psychoanalyst, Psychologist, Qualified Long-Term Care Services, Radium Treatment, Smoking Cessation Programs, Special Education for Children (ill or disabled), Specialists, Spinal Tests, Splints, Sterilization, Surgeon, Telephones and Television for the Hearing, Impaired, Therapy, Transportation Expenses for Health Care, Treatment, Vaccines, Vitamins (if prescribed), Weight Loss Programs, Wheelchair, Wig (hair loss from disease), X-Raysage 19 HSA Coalition December 7, 2004
Non-Allowable (not tax-free) Expenditures from Your Health
Examples of Non-Allowable Expenses:
Advance Payment for Future Medical Expenses, Athletic Club Membership, Automobile Insurance Premium, Babysitting (for healthy children), Boarding School Fees, Bottled Water, Commuting Expenses for the Disabled, Controlled Substances, Cosmetics and Hygiene Products, Dancing Lessons, Diaper Service, Domestic Help, Electrolysis or Hair Removal, Funeral Expenses, Hair Transplant, Health Programs at Resorts, Health Clubs, & Gyms, Household Help, Illegal Operations and Treatments, Illegally Procured Drugs, Maternity Clothes, Medigap premiums, Nutritional Supplements, Premiums for Life, Disability, Other, Accident Insurance, Premiums for your HSA Qualified High Deductible Health Plan, unless you are receiving Federal or State unemployment benefits, or you are on COBRA, Scientology Counseling, Social Activities, Special Feeds/Beverages, Swimming Lessons, Teeth Whitening, Travel for General Health Improvement, Tuition in a Particular School for Problem Children